Michael Doran, in his capacity as Senior Fellow and Director, Center for Peace and Security in the Middle East at the Hudson Institute, has written what, hands-down, is the best analysis of what is going on in Iran right now, what it means and where it might be leading.
I cannot urge you strongly enough to read Mr. Doran’s insights. Here is how it starts:
Iran is at a crossroads. The largest and most sustained wave of nationwide protests since the “Woman, Life, Freedom” uprising in 2022 and 2023 is now sweeping the country. The current marches may soon eclipse them. What began in late December 2025 as demonstrations over a collapsing currency and rising living costs has spread rapidly across cities and regions. As repression has intensified and casualties have mounted, the protests have hardened into open demands for regime change.
No matter what happens next, there is no scenario in which the Islamic Republic survives 2026 with its power intact. Too much has happened; too many uncontrollable yet intersecting factors are conspiring to erode the regime’s power. But that does not mean that revolution is inevitable and Iran will blossom into a free open society once more.
And here is just one key segment, detailing why this current internal anger/dissension is different from the earlier ones:
Why is this time different? Because the regime has lost the most basic attribute of a functioning state: control over its currency. When the gap between the official and market exchange rates reaches 35 to 1, the rial no longer adequately functions as money. Savings become meaningless, contracts lose credibility, and economic planning collapses.
The regime now presides over two separate economies. One operates in depreciating rials and sustains the formal bureaucracy. The other conducts real transactions through oil barter and hard currency, accessible only to a narrow circle of regime insiders. When the Iranian defense ministry must sell crude directly to foreign customers to finance operations—because the central budget can no longer transfer funds through normal channels—the state has lost its capacity to allocate resources. Public finance, in any meaningful sense, has ceased to function.
With foreign currency reserves frozen or inaccessible, the central bank can no longer defend the currency or manage liquidity. Monetary policy has become a series of levers attached to nothing. A government that cannot stabilize its money or credibly tax and redistribute revenue has lost one of the basic arms of the state—and it will not recover it.
The reason is structural. In practice, the Central Bank no longer controls Iran’s foreign currency at all. Sanctions have forced the regime to rely on a shadow banking system in which foreign exchange is held outside Iran, parked in shell companies and intermediaries beyond the reach of normal state institutions. The money exists, but it is not available for macroeconomic stabilization or public welfare. Instead, it is channeled through extraterritorial networks to sustain the regime’s confrontation with the West and Israel. For ordinary Iranians, this collapse is experienced in daily shortages of everything. Water is intermittent even in major cities. Electricity and fuel are rationed. Food prices outpace wages, forcing households to cut consumption and exhaust savings.
Trust me: this is a must read. And a textbook of why Iran is teetering so close to collapse, even as khamenei and his thugs kill protesters in the streets.
Use the link (here it is again). Read every word. And understand what is happening there.
